Understanding Chapter 13 Bankruptcy
This is the second type of bankruptcy that is offered to families or individuals in America. Chapter 13 bankruptcy is not as popular as chapter 7, although they are considerably filed by a number of people. Chapter 13 bankruptcy has the following attributes
- between 3 and 5 years of repayment plan
- Limited debt
Filing chapter 13 bankruptcy involves a process where you agree on a repayment plan of between 3 and 5 years. Here the court will allow you to repay some of the unsecured debt. Because of the complexity of calculations involved in creating the repayment plant, it is essential that you hire an attorney to help you through the process. Over this period, you have to completely clear all debts as well as secured debts such as mortgage and car.
Chapter 13 bankruptcy is a unique feature because this is the only loan type which limits the debts that the borrower can have. The limits set currently to $1,081,400 for secured debt and $360,475 for unsecured debt. These figures have been set forth by the lending authorities because the courts believe that you can repay your loan within that period.